question_answer

Nandini, Krish and Hina were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 28th February, 2017 their firm was dissolved. The balance sheet of the firm on the date of dissolution was as follows: Balance Sheet as at 28th February, 2017

Liabilities		Amt (Rs.)	Assets	Amt (Rs.)
Creditors		80,000	Cash	7,000
Capital A/cs			Sundry Assets	1,30,000
Nandini	75,000		Hina?s Capital	23,000
Krish	5,000	80,000
		1,60,000		1,60,000

Sundry assets were taken over by Hina for Rs. 65,000 and Nandini took over the creditors for Rs. 75,000, expenses of dissolution paid by Krish were Rs. 5,000. Prepare realisation account, partners' capital accounts and cash account. The balance sheet of A and B, who share profits and losses in the ratio of 3 : 2 on 31st March, 2017 was as follows: Balance Sheet as at 31st March, 2017

Liabilities		Amt (Rs.)	Assets		Amt (Rs.)
Creditors		28,000	Cash at Bank		10,000
Workmen's Compensation Fund		12,000	Debtors	65,000
General Reserve		20,000	(-) Provision for Doubtful Debts	(5,000)	60,000
Capital A/cs			Stock		30,000
A	60,000		Investment		50,000
B	40,000		Patents		10,000
		1,60,000			1,60,000

They decided to admit C on 1st April, 2017 for l/4th share on the following terms:

(i) C shall bring Rs. 20,000 as his share of premium for goodwill.

(ii) That unaccounted accrued income of Rs. 1,000 be provided for.

(iii) The market value of investments was Rs. 45,000.

(iv) A debtor whose dues of Rs. 5,000 were written-off as bad debts paid Rs. 4,000 settlement.

(v) A claim of Rs. 3,000 on account of workmen's compensation to be provided for.

(vi) Patents are overvalued by Rs. 2,000.

(vii) C to bring in capital equal to 1/4th of the total capital of the firm after all adjustments.

Prepare the revaluation account, partners' capital account and the balance sheet of the new firm.

Answer:

Loss on realisation = Rs. 65,000, Amount paid to Nandini = Rs. 1,24,000; amount bought in by Krish = Rs. 16 000 and Hina = Rs. 1,01,000 Total of cash account = Rs. 1,24,000 Or Loss on revaluation = Rs. 2,000; Capitals ; A = Rs. 88,200 B = 58,800 C = 49,000 balance sheet total = Rs. 2,27,000 (i) Capital reserve = Rs. 28,667 (ii) Capital reserve = Rs. 900